HUI/XAU Are In Wave C Of Wave C Of The Wave 2 Cyclical Bear Market
HUI/XAU are in Wave C of Wave C of the Wave 2 Cyclical Bear Market since 5-11-06. In the next 3-6 weeks HUI/XAU should do exactly what reliable lead indicator NEM has already done, which is to decline to their primary multi-year Secular Bull Market/very long term upcycle trendlines, currently at 200-220ish (could turn up which is why there's a wide range) for HUI and at 85-90ish for the XAU, see charts 6 and 8 at http://www.joefrocks.com/GoldStockCharts.html. NEM did a Wave A down, a Wave B up, then it's Wave C did an ABC down up down pattern, which is exactly what HUI/XAU appear to be doing, with Wave C of Wave C probably having begun Tuesday 12-5, when minor intermediate term cycle highs occurred, see chart one at http://www.joefrocks.com/GoldStockCharts.html.
The XAU has downside gaps at 138.37, and 132.67. NEM has downside gaps at 45.73, 44.88, 44.03, 42.21, 41.83, 41.09, and 40.83. The XAU has a bearish breakaway gap to the downside at 144.96 from yesterday's open.
NEM clearly broke it's minor intermediate term upcycle trendline since 10-4-06 yesterday, so, the vicious decline may rear it's head in a big way the next few days. Option expiration is on Friday, and, I think it's a triple or quadruple "witching" quarterly one, so, that will probably add to the volatility. There's a good chance that the next few days will bring brutal declines (HUI was down about 3% at yesterday's cycle low).
Fed Credit was well below average today at $2.25 Billion, was well below average yesterday at $2 Billion, and also on Friday at $2.5 Billion (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), and, fell -$1.641 Billion in the week ending 12-6-06, so index fund program buying (SPX (S & P 500) being the lead index) probably won't help much today, unless the Fed spikes the punch in a big way.
A reader wanted me to discuss SPX (S & P 500), so, I'll reiterate that I think SPX is about to collapse (Elliott Wave, indicators, rolling over, etc. are bearish), and, due to index fund programmed selling, will probably play a huge part in driving HUI/XAU way down to their primary multi-year Secular Bull Market/very long term upcycle trendlines, currently at 200-220ish (could turn up which is why there's a wide range) for HUI and at 85-90ish for the XAU, see charts 6 and 8 at http://www.joefrocks.com/GoldStockCharts.html.
Index fund programmed trading probably accounts for about 70% or more of the dollar volume on the NYSE every day, which is mind boggling. Most of the trading is AUTOMATED, which is what led to the 1987 crash, because they didn't have circuit breakers at the time and the computers kept selling.
I have some exciting news. I've probably (need to watch it more) found a lead indicator for SPX/HUI/NEM/XAU that will be a great (I mean great) complement to the NEM Lead Indicator, and, (appears to have) correctly pointed to HUI/NEM/XAU weakness yesterday and today by underperforming SPX by a wide margin on Monday and Tuesday. I might keep this lead indicator to myself (won't reveal the identity but will provide the data) if it works incredibly well. We'll see. Based on my research on the 5 day, 3 month, and longer timeframe relative performance Yahoo charts this new SPX/HUI/NEM/XAU Lead Indicator looks "awesome."
Right now for very short term timing the NEM Lead Indicator isn't that helpful because HUI/XAU are in a very weak Wave C of Wave C major downcycle (cycles being the primary consideration), and, actually the real lead indicator is probably SPX (NEM is a component of SPX), so, this potential new SPX and therefore HUI/NEM/XAU Lead Indicator may be even better than the NEM Lead Indicator, which will be amazing.
The NEM Lead Indicator works very well EXCEPT sometimes for short term/very short term (days/weeks) cycles, which is where this new Lead Indicator may be very useful. It correctly pointed to weakness yesterday and today by underperforming SPX by a wide margin on Monday and Tuesday, whereas the NEM Lead Indicator has turned very bullish recently (+1.01% vs the XAU on 12-12, -0.10% on 12-11, +1.01% on 12-8, +0.87% on 12-7, +0.27% on 12-6, +1.19% on 12-5).
HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 6 and 8 at http://www.joefrocks.com/GoldStockCharts.html. NEM's Wave 2 Cyclical Bear Market that began on 1-31-06 ended on 10-4-06 at 39.84, so, reliable lead indicator NEM is probably in a 5 yearish Wave 3 Cyclical Bull Market since 10-4-06, see chart 7 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .
HUI NEM XAU
The XAU has downside gaps at 138.37, and 132.67. NEM has downside gaps at 45.73, 44.88, 44.03, 42.21, 41.83, 41.09, and 40.83. The XAU has a bearish breakaway gap to the downside at 144.96 from yesterday's open.
NEM clearly broke it's minor intermediate term upcycle trendline since 10-4-06 yesterday, so, the vicious decline may rear it's head in a big way the next few days. Option expiration is on Friday, and, I think it's a triple or quadruple "witching" quarterly one, so, that will probably add to the volatility. There's a good chance that the next few days will bring brutal declines (HUI was down about 3% at yesterday's cycle low).
Fed Credit was well below average today at $2.25 Billion, was well below average yesterday at $2 Billion, and also on Friday at $2.5 Billion (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), and, fell -$1.641 Billion in the week ending 12-6-06, so index fund program buying (SPX (S & P 500) being the lead index) probably won't help much today, unless the Fed spikes the punch in a big way.
A reader wanted me to discuss SPX (S & P 500), so, I'll reiterate that I think SPX is about to collapse (Elliott Wave, indicators, rolling over, etc. are bearish), and, due to index fund programmed selling, will probably play a huge part in driving HUI/XAU way down to their primary multi-year Secular Bull Market/very long term upcycle trendlines, currently at 200-220ish (could turn up which is why there's a wide range) for HUI and at 85-90ish for the XAU, see charts 6 and 8 at http://www.joefrocks.com/GoldStockCharts.html.
Index fund programmed trading probably accounts for about 70% or more of the dollar volume on the NYSE every day, which is mind boggling. Most of the trading is AUTOMATED, which is what led to the 1987 crash, because they didn't have circuit breakers at the time and the computers kept selling.
I have some exciting news. I've probably (need to watch it more) found a lead indicator for SPX/HUI/NEM/XAU that will be a great (I mean great) complement to the NEM Lead Indicator, and, (appears to have) correctly pointed to HUI/NEM/XAU weakness yesterday and today by underperforming SPX by a wide margin on Monday and Tuesday. I might keep this lead indicator to myself (won't reveal the identity but will provide the data) if it works incredibly well. We'll see. Based on my research on the 5 day, 3 month, and longer timeframe relative performance Yahoo charts this new SPX/HUI/NEM/XAU Lead Indicator looks "awesome."
Right now for very short term timing the NEM Lead Indicator isn't that helpful because HUI/XAU are in a very weak Wave C of Wave C major downcycle (cycles being the primary consideration), and, actually the real lead indicator is probably SPX (NEM is a component of SPX), so, this potential new SPX and therefore HUI/NEM/XAU Lead Indicator may be even better than the NEM Lead Indicator, which will be amazing.
The NEM Lead Indicator works very well EXCEPT sometimes for short term/very short term (days/weeks) cycles, which is where this new Lead Indicator may be very useful. It correctly pointed to weakness yesterday and today by underperforming SPX by a wide margin on Monday and Tuesday, whereas the NEM Lead Indicator has turned very bullish recently (+1.01% vs the XAU on 12-12, -0.10% on 12-11, +1.01% on 12-8, +0.87% on 12-7, +0.27% on 12-6, +1.19% on 12-5).
HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 6 and 8 at http://www.joefrocks.com/GoldStockCharts.html. NEM's Wave 2 Cyclical Bear Market that began on 1-31-06 ended on 10-4-06 at 39.84, so, reliable lead indicator NEM is probably in a 5 yearish Wave 3 Cyclical Bull Market since 10-4-06, see chart 7 at http://www.joefrocks.com/GoldStockCharts.html. ....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
7:18 AM
